OptionC:Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Rev.K:SovietCanuckistan: The ONE investment refers to a home. A lot of people here have very little savings and they are counting on their home to increase in value without end. The average home in my city costs $527,763 (Dec 2013). People are leveraged to the tits and the only have money to pay the mortgage, not much else.

Calgary's vacancy rate at the moment is less than 1%

Calgary's unemployment is forecast to decrease over the next few years.

Home values have continued to rise in the wake of the flood.

Home values have not substantially dropped since the crazy price increase of 2006-2007.

Calgary will be the exception to any sort of crash scenario. Growth is still strong and prices have held.

Ugg, and to think, you "oversee financial and budgeting policies for my municipality." And you're 34. No wonder the city's finances are in the toilet.

Flab:OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the rest is a HELOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 105 year fixed rate mortgage for the 5 morelast years.

Article: Half of all single-family homes were sold at a price higher than $225,000, which is stable compared to 2012. The median price of condominiums and plexes also remained relatively stable in 2013, as both property categories registered a slight increase of 1 per cent. Four of the province's six Census Metropolitan Areas (CMAs) continued to post increases in the median price of single-family homes in 2013: Montréal (+2 per cent), Sherbrooke (+2 per cent), Québec City (+3 per cent) and Saguenay (+3 per cent). However, these increases are smaller than those registered in 2012. Finally, the median price of single-family homes remained stable in Gatineau and decreased slightly in Trois-Rivières (-1 per cent).

Okay, so prices remained pretty much the same for two years in a row now. How does this equal "collapse"? Is it because sales are down?

this is written by a realtor. So yes, their world is collapsing around them because they can't make $100,000/wk in commissions anymore, and actually have to *gasp* schedule open-houses, and visits, and stuff, and how the Hell am I going to pay for that custom paint job on the new GLK?

Flab:OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Flab:OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Are the renegotiated mortgages guaranteed to be available at some reasonable terms? If not, that actually sounds like the pre-Great Depression era mortgage market in the US, which (obviously) did not turn out so well and led to the creation of the 30 year fixed-rate loan.

OptionC:Flab: OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Are the renegotiated mortgages guaranteed to be available at some reasonable terms? If not, that actually sounds like the pre-Great Depression era mortgage market in the US, which (obviously) did not turn out so well and led to the creation of the 30 year fixed-rate loan.

The renegotiated rates are market rates at the time of renegotiation. And if bank A doesn't offer good enough rates, but bank B does, you just switch to the new bank and pay a minimal penalty (that should be offset by the new rate you're getting at bank B).

OptionC:Flab: OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Are the renegotiated mortgages guaranteed to be available at some reasonable terms? If not, that actually sounds like the pre-Great Depression era mortgage market in the US, which (obviously) did not turn out so well and led to the creation of the 30 year fixed-rate loan.

There's also variable-rate mortgages here too.

You can just google "Canadian mortgage rates". Those are the rates people pay.

Flab:The renegotiated rates are market rates at the time of renegotiation. And if bank A doesn't offer good enough rates, but bank B does, you just switch to the new bank and pay a minimal penalty (that should be offset by the new rate you're getting at bank B).

Which is all well and good when things are humming along. What happens if the banks suddenly get very risk averse (due to, I dunno, a housing market decline) and decide that someone who was a qualified buyer in year X is not a qualified buyer in year X+5? Are they still obligated to offer a renegotiated mortgage?

OptionC:Flab: OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Are the renegotiated mortgages guaranteed to be available at some reasonable terms? If not, that actually sounds like the pre-Great Depression era mortgage market in the US, which (obviously) did not turn out so well and led to the creation of the 30 year fixed-rate loan.

Also you can just keep amortizing over a 25 year period every time you renew. This is what I do, because it keeps my minimum obligation low, just in case something horrible happens. I just boost the payment, but I can lower it back down if I have to.

OptionC:Flab: The renegotiated rates are market rates at the time of renegotiation. And if bank A doesn't offer good enough rates, but bank B does, you just switch to the new bank and pay a minimal penalty (that should be offset by the new rate you're getting at bank B).

Which is all well and good when things are humming along. What happens if the banks suddenly get very risk averse (due to, I dunno, a housing market decline) and decide that someone who was a qualified buyer in year X is not a qualified buyer in year X+5? Are they still obligated to offer a renegotiated mortgage?

Typically they'll offer to renew but at a higher interest rate. You don't have to stay with them though. Having said that, if it's a general market condition then every lender will have high interest rates.

This did happen in the 80s. Housing prices crashed, interest rates were through the roof, and people just walked away from their homes.

Shazam999:OptionC: Flab: OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Are the renegotiated mortgages guaranteed to be available at some reasonable terms? If not, that actually sounds like the pre-Great Depression era mortgage market in the US, which (obviously) did not turn out so well and led to the creation of the 30 year fixed-rate loan.

Also you can just keep amortizing over a 25 year period every time you renew. This is what I do, because it keeps my minimum obligation low, just in case something horrible happens. I just boost the payment, but I can lower it back down if I have to.

Doesn't that mean that you'll never actually own the house outright in a Xeno's paradox sort of way (assuming you made minimum payments)?

OptionC:Shazam999: OptionC: Flab: OptionC: Also, aren't most Canadian mortgages equivalent to a 5/1 ARM in the US?

Not quite. They are fixed-rate long-term mortgages that get renegotiated every 5 years or so. In other words, you get: a fixed-rate 25 year mortgage for five years at rate X, then after those 5 years, you renegotiate another fixed-rate 20 year mortgage for 7 years, because you think the rates are going to go up and you want to be safe, then after those 7 years, you renegotiatie a mixed-rate mortgage for 3 years, where half is fixed-rate, and the resl is a HLOC because you know you're going to have to redo the roof and the wife thinks it's time to remodel the kitchen, then you renegotiate a 10 year fixed rate mortgage for 5 more years, then you renegotiate a 10 year fixed rate mortgage for 5 more years.

Are the renegotiated mortgages guaranteed to be available at some reasonable terms? If not, that actually sounds like the pre-Great Depression era mortgage market in the US, which (obviously) did not turn out so well and led to the creation of the 30 year fixed-rate loan.

Also you can just keep amortizing over a 25 year period every time you renew. This is what I do, because it keeps my minimum obligation low, just in case something horrible happens. I just boost the payment, but I can lower it back down if I have to.

Doesn't that mean that you'll never actually own the house outright in a Xeno's paradox sort of way (assuming you made minimum payments)?

Glad I moved east instead of buying a condo in the GTA, and glad I got a 5 year fixed rate. Home prices are already below what they should be, where I am now (Fredericton) so I don't expect a big drop here.

OptionC:Flab: The renegotiated rates are market rates at the time of renegotiation. And if bank A doesn't offer good enough rates, but bank B does, you just switch to the new bank and pay a minimal penalty (that should be offset by the new rate you're getting at bank B).

Which is all well and good when things are humming along. What happens if the banks suddenly get very risk averse (due to, I dunno, a housing market decline) and decide that someone who was a qualified buyer in year X is not a qualified buyer in year X+5? Are they still obligated to offer a renegotiated mortgage?

No, they can ask you to pay in full for the remainder of what you owe. ( link )

Flab:this is written by a realtor. So yes, their world is collapsing around them because they can't make $100,000/wk in commissions anymore, and actually have to *gasp* schedule open-houses, and visits, and stuff, and how the Hell am I going to pay for that custom paint job on the new GLK?

Ah, then they should come down to the DC market. I was looking for a place in the spring of last year. All open houses were mobbed. I mean, people lining up outside before the showing, and elbowing past each other to get a look at each of the rooms. The realtors at these showings just sit back like kings and watch over their subjects, knowing their four hours of time was guaranteeing them a sale that was 20% over asking price and at least $10k in their pocket.

Rev.K:SovietCanuckistan: The ONE investment refers to a home. A lot of people here have very little savings and they are counting on their home to increase in value without end. The average home in my city costs $527,763 (Dec 2013). People are leveraged to the tits and the only have money to pay the mortgage, not much else.

Calgary's vacancy rate at the moment is less than 1%

Calgary's unemployment is forecast to decrease over the next few years.

Home values have continued to rise in the wake of the flood.

Home values have not substantially dropped since the crazy price increase of 2006-2007.

Calgary will be the exception to any sort of crash scenario. Growth is still strong and prices have held.

ruta:Rev.K: SovietCanuckistan: The ONE investment refers to a home. A lot of people here have very little savings and they are counting on their home to increase in value without end. The average home in my city costs $527,763 (Dec 2013). People are leveraged to the tits and the only have money to pay the mortgage, not much else.

Calgary's vacancy rate at the moment is less than 1%

Calgary's unemployment is forecast to decrease over the next few years.

Home values have continued to rise in the wake of the flood.

Home values have not substantially dropped since the crazy price increase of 2006-2007.

Calgary will be the exception to any sort of crash scenario. Growth is still strong and prices have held.

Yikes. 34 years old, huh. And looking after municipal finances. Eep. That's cute that you think Alberta is immune to recession. Tell your elders the above and ask them why they're chuckling and shaking their heads. Jesus, kids these days.

Ahem.

*Cough*

All the activity we're seeing is the petroleum industry frantically making hay while the sun is still shining. Calgary might not crash at the same time as the rest of the country, but it will crash.

Astounding really, and of course a guy like Rev.K will vote Liberal in the next federal election, who will then promptly put in NEP2, and that'll be that for Calgary.

sn0wblind:montreal is a temporary city for most, generally being because of the lack of work. most come here to get their education or for temporary work, then leave for greener pastures. thanks to quebec bureaucrats, companies have to face a lot of red tape and headaches just to do business here; unless the industry is specifically targeted for provincial government incentives.without jobs, no one wants to buy the plethora of condos popping up everywhere this past year.

But I was told regulation does not hinder business.

/What I love most about Quebec is that despite how badly they want to be French, the French hate them too. They don't even speak real French. Nobody likes them.

Astounding really, and of course a guy like Rev.K will vote Liberal in the next federal election, who will then promptly put in NEP2, and that'll be that for Calgary.

Now we disagree. The first NEP didn't trigger the recession, it only exacerbated it. Continuing to scapegoat it and Trudeau for the recession 40 years on is farking tiresome and simple-minded. Lougheed was at least smart and created the Heritage fund to shore Alberta up against future calamities, but now that's been pissed away. By who? Not by the federal Liberals. Alberta ought to have the finest education, healthcare, and innovative research and industry in the world with all that money coursing around, but instead all we have is inflated real estate and petroleum companies biatching and moaning if we dare to skim any off. All the eggs remain in one farking basket. We're the farking Beverly Hillbillies.

ruta:Yikes. 34 years old, huh. And looking after municipal finances. Eep. That's cute that you think Alberta is immune to recession

Shazam999:You're proud of your position, and yet the city is actually running of out debt room. Also projects are routinely over budget. Are you sure you have a handle on finances?

You should go back and look at what I wrote.

I'll be the first to say that of course Calgary is not immune to recession. My outlook may have come across as overly cheery, but I'm not saying that Calgary's economic growth will never stop and it's sunshine all the time.

What I did say is that while a recession could happen, Calgary is well positioned because strong growth continues, which drives demand for housing. Calgary's vacancy rate is exceptionally low, partially due to the June flood, and unemployment in Calgary is forecast to decrease in the coming years.

My point is that the economic indicators aren't consistent with an imminent crash, something that has been predicted since the housing surge in 2007. That isn't to say it can't happen, but indicators are not signalling that it will happen soon.

Astounding really, and of course a guy like Rev.K will vote Liberal in the next federal election, who will then promptly put in NEP2, and that'll be that for Calgary.

Now we disagree. The first NEP didn't trigger the recession, it only exacerbated it. Continuing to scapegoat it and Trudeau for the recession 40 years on is farking tiresome and simple-minded. Lougheed was at least smart and created the Heritage fund to shore Alberta up against future calamities, but now that's been pissed away. By who? Not by the federal Liberals. Alberta ought to have the finest education, healthcare, and innovative research and industry in the world with all that money coursing around, but instead all we have is inflated real estate and petroleum companies biatching and moaning if we dare to skim any off. All the eggs remain in one farking basket. We're the farking Beverly Hillbillies.

LemSkroob:Maybe this will force them to all go back to France? That would be best.

Yeah, about that. France doesn't want them back. They're considered to be colonial peasants who speak a bizarre, bastardized version of French. A lot of their ancestors were basically exiled to the New World for being low-life scum.

/disclaimer: that's what the French think, not what I think. The French Canadian guys I work with are pretty decent guys as long as you don't talk politics.

CSB: My mother-in-law has a duplex in NDG that she refuses to sell, no matter how much I try to explain that the Montreal housing market has topped. She doesn't have a lot of other assets, so I don't know what else she expects to retire on (she's welcome to my and Mrs. Fuccon's spare room, but that doesn't strike me as ideal either). She rents out the upstairs, but even the part she lives in is too big for just her and her husband.

I realized I might as well have been talking to myself when she said, "I don't care about your economic models, Mikey, this is my house and I'm not selling!"

Rev.K:My point is that the economic indicators aren't consistent with an imminent crash, something that has been predicted since the housing surge in 2007. That isn't to say it can't happen, but indicators are not signalling that it will happen soon.

The person whose job is managing public funds should be the most pessimistic person in the room. You're not there to be the next Warren Buffet.